(Dec. 10, 2021) State-chartered credit unions maintained their hold on a slight majority of all credit union assets over the third quarter 2021, with about 50.2% of the total, according to numbers released this week by NCUA and compiled by NASCUS.
The latest numbers make the fourth quarter in a row (since the fourth quarter of 2020) that state credit unions have held the most assets. The results are derived from NCUA third-quarter call reports (for federally insured credit unions) and American Share Insurance, Inc., for privately insured CUs (compiled by NASCUS).
Additionally, state and federal credit unions crossed a new threshold in the third quarter: both exceeded $1 trillion in assets for the first time, for a total of $2.04 trillion combined ($1.02 trillion for states, which includes both federally insured and privately insured), and $1.01 trillion for FCUs.
NASCUS President and CEO Lucy Ito said the third quarter results demonstrate the resilience of state credit unions, their members’ trust in their service and viability, and careful and reasonable supervision by state authorities. “The financial impact of the pandemic caused many members to save their money, particularly that provided by the government to maintain economic activity,” Ito said. “They turned to their credit unions as the repository of their funds, because they knew it was a safe, sound, convenient and responsible shelter for them.”
Overall, assets at both state and federal credit unions have grown by about 9% since the end of last year, reflecting the influx of savings by members.
Meanwhile, memberships at credit unions exceeded 130 million for the first time, with 48.1% held by SCUs and 51.9% by FCUs.
The number of credit unions fell again by the end of the third quarter (continuing a long-term trend driven by consolidation of the industry), with 5,096 total (38.7% SCUs and 61.3% FCUs).
Financially, credit unions posted a solid performance in the third quarter, according to the NCUA numbers for federally insured credit unions (both SCUs and FCUs). That is:
- An aggregate net worth ratio (net worth as a percentage of total assets) of 10.23% at the end of the third quarter, up from 10.16% at the end of the previous quarter. Compared to a year earlier (third-quarter 2020) when the ratio was 10.44%, the ratio had declined. However, it bottomed out in the first quarter of the year at 10.02% and has been climbing, quarter by quarter, since then.
- Return on average assets – a broad indicator of credit union profitability overall– was 112 basis points in the third quarter, NCUA said, the same as posted in the second quarter, but up from 65 basis points in the same period a year earlier. The median credit union return on assets in third-quarter 2021, NCUA noted, was 56 bp, up from 42 bp a year earlier
- Net interest margin was $50 billion, or 2.59% of average assets – up from $48.1 billion, but down as a percentage of average assets, which was 2.87%.